The Indian rupee has hit its all-time low. The rupee has depreciated by almost 2 paise against the US dollar on Monday (November 4). It closed at Rs 84.11 per dollar after the day's trading.
The rupee fell against the dollar for the 11th consecutive trading day. Earlier on October 31, the rupee had closed at a low of 84.08 per dollar. On October 17, it reached a level of 84.03 against the dollar.
This decline in the rupee is being seen due to equity withdrawal from the Indian stock market i.e. share sales and the American elections. Because of this, the influence of dollar against the rupee has become stronger.
A decline of 941 points was seen in the stock market The Sensex lost 941 points (1.18%) today. It closed at 78,782. At the same time, the Nifty also fell by 309 points (1.27%) to close at 23,995.
The rupee touched an intraday low as well The rupee touched an intra-day low of 84.1225 against the dollar. According to the report, the rupee opened at 84.1125 against the dollar on Monday and touched a low of 84.1225 at one point during trading. Market watchers believe that the rupee may touch its all-time low of 84.25 in the coming days.
Imports will be expensive Depreciation in rupee means that import of goods is going to become more expensive for India. Apart from this, traveling and studying abroad has also become expensive. Suppose, when the rupee was worth 50 against the dollar, Indian students in America could get 1 dollar for 50 rupees. Now students have to spend 83.40 rupees for 1 dollar. This will make everything from fees to accommodation, food and other things expensive.
How is the value of a currency determined? If the value of any other currency falls against the dollar, it is called a fall, break, weakening of the currency. Currency Depreciation in English. Every country has foreign currency reserves with which it conducts international transactions. The effect of increase and decrease in foreign reserves is seen on currency prices.
If the dollar in India's foreign reserves is equal to the US rupee reserves, the value of the rupee will remain stable. If our dollar depreciates, the rupee will weaken, if it increases, the rupee will strengthen. It is called floating rate system.
Image Credit: (Divya-Bhaskar): Images/graphics belong to (Divya-Bhaskar).
